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This EPRS paper analyses progress made in carrying through the policy agenda set by Ursula von der Leyen, President of the European Commission, and her College of Commissioners when they took office in December 2019. It looks in particular at the state of play with respect to delivery of the agenda's six key priorities, as we enter the final year running up to the 2024 European elections. The von der Leyen Commission – either on taking office or more recently – has announced a total of 597 planned ...

The Commission’s reform orientations propose that debt sustainability analysis (DSA) should serve as an anchor in EU fiscal rules. After discussing the main assumptions of DSAs in projecting public debt ratios, we analyse four critical aspects in designing such a reform: making judgement calls with regard to DSA assumptions; ensuring transparency and democratic legitimacy; promoting public investment in the context of climate goals; and tackling cross-border effects of fiscal policy, in particular ...

This note provides an overview of the implementation of the 2022 recommendation on the economic policies of the euro area proposed by the Commission and agreed by the Council. It makes use of public information and proxies such as on how the Eurogroup has integrated euro area recommendations’ concerns in their “thematic discussions” and work programmes. This note will be updated in light of relevant developments.

This note looks at the 2023 recommendation on the economic policies of the euro area proposed by the Commission and agreed by the Council. The note provides a review of the euro area recommendations from an institutional perspective and includes broad comparisons to earlier recommendations, in order to illustrate how policy concerns have evolved over time. This note is an update on a previous version and will be updated in light of relevant developments.

The ECB has orchestrated a U-turn in monetary policy since July 2022. However, inflation remains a considerable distance away from its own medium-term objective. The ECB relies too heavily on data dependence and uncertainty in communicating monetary policy to markets and the public. It also fails to acknowledge the inherent tensions that exist between monetary and financial stability policies. The current hawkish stance is appropriate but leaves the ECB open to more credibility losses should tail ...

Inflationary pressures in the euro area slightly eased over the last few months, mainly due to the decrease in energy prices. However, the core inflation rate still remains well above the ECB’s target. A rise in inflation expectations is still a major risk to further increase in inflation, and thus should be monitored closely. We find that contractionary monetary policy by the ECB and the Fed decreases energy prices and the headline price level in the euro area. This paper was provided by the Economic ...

This briefing has been prepared for the public hearing with the Chair of the ECB Supervisory Board, Andrea Enria, in ECON on 21 March 2023, covering: • A European perspective on recent US bank failures, in particular Silicon Valley Bank • SREP results for 2022 • Supervisory Banking Statistics • EBF-commissioned study on the cost of regulation for EU banks • EBA 2023 EU-wide stress test scenario • ECB sanction for failing to report cyber incident within deadline • Enhanced Code of Conduct ...

This note is prepared in view of a regular public hearing with the Chair of the European Systemic Risk Board (ESRB), Christine Lagarde, which will take place on 20 March 2023. The briefing (i) provides a European per-spective on recent US bank failures; (ii) provides summary of the risk outlook and the picking up of corporate insolvencies; (iii) describes the risks building up in housing markets; (iv) summarises the ongoing continuing work on the macroprudential policy toolkit for cyber resilience ...

Even if QT is as inefficient as QE at affecting inflation, now is the time to cut the size of central banks’ balance sheets. The stabilising effects of large balance sheets are eroded as the financial markets adapt to excess reserves. If QT proves to be financially destabilising, it can be temporarily interrupted, possibly even reversed. This document was provided by the Economic Governance and EMU Scrutiny Unit at the request of the Committee on Economic and Monetary Affairs (ECON) ahead of the ...

The paper explores the possible direct and indirect impacts of the Russian war in Ukraine on different measures of inflation in the euro area. It notably shows that the core inflation index is sensitive to energy and food prices, and questions its reliability for policy decisions. Finally, we discuss medium-term inflation prospects and the effectiveness of monetary policy measures. This paper was provided by the Economic Governance and EMU Scrutiny Unit at the request of the Committee on Economic ...